Wanna buy some Swiss francs? Switzerland will be happy to print some up for you.
Switzerland eagerly joins the mass dive off the cliff.
Anyone familiar with Gresham’s Law, in economics. Bad money will always drive out good money, good money being of good value.
It is both ironic and disturbing that a currency of value must be avoided.
The Swiss economy, even the prosperity of it’s citizens, is far too reliant on exports, of course, mostly financial services. Hedging against the current situation, i.e., every other national government spends itself into bankruptcy and debases their currencies, making the Swiss franc artificially strong, would be rather difficult for them.
Imagine having a banking business that deals in all different currencies that depreciate all year. You start out x number of Swiss Francs, do business all year in currencies that lose value relative to the Swiss Franc, then at year end you prepare your profit and loss statement expressed in Swiss Francs. Ouch !
Now imagine if they could have used their Swiss Francs to buy wheat, corn and crude oil all year long, and sell them to other countries and be paid in the same Swiss Franc. They could buy 10,000 lbs. of commodity on a certain day, then a few months later sell 9,990 lbs of that commodity for the same number of Swiss Francs.
Since the Swiss Franc is not the dominant world currency, the Swiss do not have the benefit of being able to buy things always in their own currency. If they did, the strength of their currency would simply give them more purchasing power internationally.
This illustrates why it is imperative for America to have the U.S. Dollar retain it’s position as the world’s foremost trading currency.
America takes for granted the fact that world trade of commodities, raw materials and goods and services of all kinds can always take place in U.S. dollars. So how well our currency performs relative to others - up until now - has not really started to hurt us in real terms.
We have no idea of what pain is until we consider what our situation will be if the U.S. Dollar loses it’s general acceptance.
Think how expensive life would be for us here if we had to trade our Dollars for Yuan or Euros every time we wanted to buy something - and our Dollars were worth less and less every time we exchanged them.
Congresscritters think they are smart alecks, devaluing the U.S. Dollar. And, mind you, if Dollars were “backed” by gold, they would be constantly knocking down the Dollar to gold conversion, devaluing them just as fast.
We shall see when things collapse.
Also, a lesson learned; local economies need to be able to thrive on their own without enormous net exports - or imports - so they are insulated from messes “outside” the local economy.
But then again, we’re asking government leaders to be wise.